University of the Philippines Cebu

Business Management Cluster

Individual Final Paper - ​ USAID Innovation Ecosystem Philippines

In partial fulfillment
of the requirements in
MGT 197 Special Topics in Management

Submitted to

Dr. Mary Gretchen F. Chaves

17, November 2015

Pasicolan, Frances Tracy C.

PROBLEM
What should Philipppine universities, industry and government do to fully utilize or maximize the potential of young
researchers for the development of science, tecnology, engineering, agriculture and mathematics (STEAM) fields in
the Philippines?

OBJECTIVES
- to utilize the capability of young researchers in the Philippines and abroad for the Philippines
- to enhance the collaboration among university, industry and government
- to motivate highschool graduating students to pursue career in STEAM field
- to increase the impact of innovation system in STEAM fields in GDP

CRITICAL SUCCESS FACTORS

Cost-effective (35%)
The cost of implenting the alterntive course of action should not exceed 30% after the year of implentation. Cost
effectiveness is a critical factor for success because optimum results are needed especially for country who will
engage in the global market and to be globally competitive. Being cost effective entails a lot of advantages for a
country that properly utilizes its resources and it will continuously give them the targeted profit. and contribution of 1
percent gross domestic product (GDP) benchmark.
Retention Rate of Filipinos (15%)
The alternative must result to retaining talented Filipino researchers to work here in the university, domestic and
givernment companies. Employee retention is critical for success because development of STEAM fields in the
Philippines involve utilizing and motivating talented researchers who have the capability and capacity to innovate
products and services to raise Philippines as a Tier 1 country.
Number of published researches (25%)
The alternative must contribute research and knowledge creation that will increase the volume of published research
by 80% by the end of the first year of implementation. Education and knowledge creation is a critiical success factor
because research is the fundamental drive for the innovation ecosystem in the STEAM dfield and for the development
of the Philippines. Philippines will be not only be utilizing the skills and abilities of the talented researchers but also will
gain access to the knwledge that can shared and collaboration among entities inolve in the innovation ecosystem, i.e.
reseacrhers, universities,
Number of commercialized innovative Filipino products and services (25%)
The alternative must contribute Commecial products and services is a success factor because innovation can only be
deeamed innovation once the product and/or service have reached the market. These goods and services will
contribute to the GDP of the Philippines and income of the involved parties in the development of an innovative
project.

SWOT ANALYSIS
Strengths
Huge supply of skilled workers in the STEAM field
Exporting skilled technical personnel in abundance to companies worldwide and atrrating companies to outsource
their operation in the Philippines. The domestic and foreign industry can utlize the human capital asset by providing
them employment opporunities in the STEAM field that are not mostly as admistrative personnels and/or consultants
but for research and development-staff positions in the university and/or companies to develop innovative solutions in
the pressing problems today and in the future.
Strong priority that students and their families place on the educational work ethic
Important role of univeristies in honing and developing the skills and abilities of the young generation, so they can
formulate solution to the pressing problems that the community is facing today.
“Top univeristies” are producing highly skilled technical graduates
The production of highly skilled technical graduates entails that the academic curriculum of these univeristies are at
par with that of the foreign univeristies despite the initial k to 10th grade educational foundation. Thus, highly skilled
graduates have high chance of getting employment in the field of their degree program.
Renewed and widespread effort of government agencies to promote and to impose research and publishing
requirements on higher education institutions.
The continuous effort of the government in partnership with higher educational institutions to require their students and
faculties to conduct research entails that the said institutions see the imperative value of research for the development
of the whole Philippines through research in the science, tecnology, engineering, agriculture and mathematics
(STEAM) fields.

Weaknesses
STEAM graduates are perceived as lacking exposure to “current best practices”
Although the current STEM graduates are deemed to be highly skilled by domestic and foreign companies, the said
graduates are deemed to have inadequate exposure to and experience in the field of STEAM opportunities that they
can exploit. The graduates need a significant 96 to 18 months) additional training for those who are hired in
multinational companies. Thus, the statement entails that innovation will not be maximized without the sufficient skills
and experience of the human capital, the critical player in the innovation ecosystem.
Relative lack of STEM-oriented PhD programs, and the near-total absence of post-doctoral research training
STEAM graduates who want to pursue master’s level and PhD level of STEAM-related programs leave the country to
study abroad which means the likelihood that the said graduates will working in the STEAM field in the Philippines is
low. In addition. the absence of specialized technical talent at PhD level further reduces the ability of the STEAM
industry in the Philippines to innovate their products and services.
Few published researches
Although the government has imposed and required research and publications among universities and colleges all
over the country, the insuffient volume of published researches entails that the innovation drive in the Philippines is not
yet achieved.
Lack of sufficient government investment or funding
Although Filipinos are gifted with skills and talents in developing ‘commerciable” innovative products and services, the
insufficient funding or appropriation of the government for STEAM field may it be for university or independent
research centers discourage Filipinos to pursue employment in the Philippines and seek funding from multinational
companies who will have patent the innovative products and services created by the Filipinos. As stated in the
research, “Philippines total research expenditure is low, falling far short of the commonly accpeted target 1 percent to
support a healthy innovation ecosystem.” Competitive buidding and procurement processes for scientific equipment
and consumables discourage stalented researchers to innovate.
Local companies unwillingess to pay higher wages to talented and skilled technical Filipinos
PhD level graduates and talented researchers are discouraged to work for Filipino companies in the Philippines
because of the insufficient pay they receive from these companies. Thus, local companies ae having the difficult time
retaining advanced technical personnel who are easily persuaded with a lucrative employment abroad.
Insufficient number of patents and intellectual property rights
Amidst the knowledge creation and talent contribution of advanced skilled researcher, the number of patents and
intellectual property rights is not enough to drive the innovation ecosystem in the Philippines. And although therehave
been intellectual property rights and patent agencies arpund the country, there are few commericial viable patented
Filipino owned and manufactured products and services because engineers, rsearchers working in multinational and
foreign-owned R&D centers in the country who were trained in and directly involved in patenting are filed in the
companie’s home ocuntries and key markets, impeding the Philippines to gain advantage and vale from the patented
products and services developed by Filipinos.
Talented researchers in the adminsitrative position
Instead of using the degree programs and advanced-level of education some Filipinos have earned especially in
developing innovative products and servies in the STEAM fields, highly skilled and talented researchers are given
promotions in the admistrative positions which impede them from applying their

Opportunities
Competing domestic and foreign companies to recruit highly skilled Filipinos
Given that Filipinos are perceived to be highly skilled technical employees, employment opporunities are everywhere
in the local and foreign scene. Talented Filipinos can further enhance their skills and competencies by working in
domestic and foreign companies and contribute in the local and international innovation system.
Available funding from the government, domestic and foreign non-profit and profit-organization
There are available funding from different sectors such as the government, domestic or foreign priavte companies who
are willing to invest in the reseaches in the STEAM fields to gain market share and to exude gobal competence and
competitive advantage through R&D.Some univeristies established partenrship with local companies or foreign
multinational companies to innovate prroducts and services aside from the competitive bidding for government
appropriation.
Filipino graduates who pursued graduate studies (master’s level and/or phD level) abroad
These Filipinos who have been exp[osed to the research-centricity in foreign countries are suitable hires as faculty
members in universities. They can contribute in the knowledge market by helping the STEAM industry with research
and development of innovative products and services.
Availability of intellectual property rights
The presence of intellectual property rights such as protection, patent licensing and commercialization encourages
researches whether in univeristies, government-owned corporation, domestic or foreign companies to conduct
research and development to market commercialy viable innovative products and services.

Threat
Attractive salary and employment abroad
Talented researchers and PhD graduates are hard to retain in the Philippines especially that employment abroad is
more attractive. Instead of working in and for the development of local companies and the innovation ecosystem in the
Philippines, Filipino graduates and PhD workers abraod contribute more to the foreign innovation system.
Higher paying jopbs in BPO operations (call centers
Aside from the lucrative employment abroad, domestic and multinational companies compete from the huge chunk of
highly skilled technical Filipino employees who are attacted to a high paying job in a . This affect the innovation system
in such a way that it impedes collaboration, continuous knowledge creaiong and sharing among the indivdual
researchers and entities that will need to access creative collaboration in order to develop innovative products and
services.
Multinational companies patenting the innovative products and services (under their name)invented and developed by
the Filipinos
The Philippine innovation ecosystem cannot benefit from the income generation from the commercialized and
patented innovative products and service developed by highly skilled reseacrhers in partnersip with foreign-owned or
multinational companies because the licensing is under the home country.

ALTERNATIVE COURSES OF ACTION

1. HIEPPP build Business and STEAM incubators
Higher educational instituions-private-public partnership will be planning and developing of innovative
products and services with the help of financing from the government and the private sector. State and private
univeristies and colleges will be imposed by the government to develop business and STEAM incubators especially for
those that offer STEAM-related programs. The faculty researchers will help and collaborate with the students who
have potential and commercially viable innovative ideas that can be transformed into products and services. By doing
these, the university instigate a culture of research and devbelopment aamong its students, faculty members, private
sector and givernment. In addition to government imposed research and publications for the faculties, the students will
be required not only to conduct researches and publish them, buy also to plan and develop prototypes of an
innovative product/services.
2. Government-appropriated STEAM Innovation Competitions
Aside from the appropriated budget for innovation reseacrh centers that the government will allot, the
government will hold STEAM innovation Competition for each field: science, tenchnology, engineering, agriculture and
mathematics wherein individual, universities and even domestic companies will compete for a price of
government-sponsored commercializing ther innovative product or service.
3. PPP Business incubators
Private-public partnership will maximize the knowledge creation and sharing of talented researchers in such a
way that the domestic private companies are given incentives by the government to finance the research and
development of the innovative projects and products and services. in addition, the incoming graduates with a degree
program in STEAM fields will be given internship opportunities to work in the R&D department of the domestic private
companies and the government-owned corporations to expose the incoming graduates in the open-innovation cycle
and to training.

ANALYSIS OF ALTERNATIVE COURSES OF ACTION

HIEPPP build Government-appropria PPP Business and

Business and STEAM ted STEAM Innovation STEAM incubators
incubators Competitions
 Cost-effective (35%) 4 1.4 3 1.05 4 1.4

Retention Rate (15%) 4 0.6 3 0.45 3 0.45

Number of researches (25%) 5 1.25 4 1.0 5 1.25

Number of commercialized products 5 1.25 4 1.0 5 1.25

and/or services (25%)

Total Weighted Score 4.5 3.5 4.35

*1 as the lowest and 5 as the highest score

RECOMMENDATION
Among the alternatives, I have chosen ​higher educational institutions-private-public partnership (HEIPPP)
build BUSINESS and STEAM incubators​. Given the facts forementioned in the swot anaylsis, the insufficient funding
from the government can be compensated from the investments from domestic priavte corporation. I focus the
alternative with “domestic” private companies because I believe there is a need for the local companies to innovate
their people, process and system to be globally competitive. The local companies can take advantage of PhD level
employees and talented researchers produced by top performing univserities by providing performance or skill based
pay to compensate the skills ans knwledge contribution of the said individuals. As mentioned in the research, the
realignment of trust and collaboration between univeristies and the STEAM industries is imperative for the
development and growth of the Philipppineinnovation ecosystem. The role of the government will be to serve as an
intermediary between the parties, to ensure that no laws or rights will be violated and to stimulate mutual benefits
among the parties. Although innovation focuses on STEAM fields, it is necessary for the stakeholders to include
business in the equation because formulating an innovative idea and converting it into an innovative products and/or
services will not be enough without properly segmenting, targeting and positioning the value proposition to the market.
Aside from building a culture of innovative knowledge creation and collaboration among the stakeholders and properly
allocating funds and resources to the projects, the participative consultation among the higher educational institutions,
government and private sector allows the clarifying and settling of issues as well as the scope and limitation of each
entity. And lastly, capacity building will not be effective without the help of the government and the private sector.

IMPLEMENTATION
A ​formal agreement will planned and constituted by the involved parties wll include the implementing
guidelines, i.e. resource sharing, capacity building, promulgated laws and profit distribution. Higher educational
instituions-private-public partnership will be planning and developing of innovative products and services with the help
of ​financing from the government and the private sector​. State and private univeristies and colleges will be imposed by
the government to develop business and STEAM incubators especially for those that offer STEAM-related programs.
The faculty researchers will help and collaborate with the students who have potential and commercially viable
innovative ideas that can be transformed into products and services. By doing these, the university ​instigate a culture
of collaborative research and development among its students, faculty members, private sector and givernment. In
addition to government imposed research and publications for the faculties, the students will be required not only to
conduct researches and publish them​, buy also to ​plan and develop prototypes of an innovative product/services.